A condo corporation’s refusal to accept condo fee payments from an owner can be a precursor to litigation.
The Condo Act, subsection 134(5), entitles a condominium corporation to compensation for costs in litigation against a unit owner after obtaining from the court any award of damages or costs.
One reason for this subsection is to protect innocent condo owners from paying the price of undeserving litigation.
This subsection can also be used to threaten condo owners. A condo corporation that rejects common area expense payments from a condo owner can improve the likelihood of obtaining a favourable court judgement in the amount of outstanding common expenses. This would allow them to attach a lien to the condo owner’s suite for full indemnity costs. One judge while ruling on condo corporation litigation wrote that “This section unfortunately incentivizes recalcitrant, litigious behaviour by condominium boards of directors and their advisors who may be so inclined.”
Publication Date: March 2017
